Advertisers Want To Buy Audiences, So Adobe Buys Demdex

Adobe (NSDQ: ADBE) has acquired audience data management company Demdex as the software company continues to build its advertising business. Bringing in New York-based Demdex adds another layer for Adobe’s existing audience targeting tools, which it began assembling a year and a half ago when it purchased Omniture (NSDQ: OMTR) for $1.8 billion.

Terms of this deal, which closes today, were not disclosed. Demdex, founded in 2008, will be folded into the Adobe Online Marketing Suite. It will become part of Omniture and the Demdex brand name will eventually be dropped. Randy Nicolau, Demdex’s CEO and co-founder, will join Adobe, though his new title hasn’t been determined yet. No layoffs or “redundancies” are expected as a result of the merger, said Matt Langie, an Adobe senior director, in an interview with paidContent.

The selling point that Adobe will bring to its publisher and advertiser clients as part of the Demdex deal is that it will help both sides better iron out the complexities and inefficiencies that have emerged in online advertising as spending has risen.

Part of the complexity stems from the desire of advertisers to buy “audiences” not impressions from publishers. In turn, publishers are reluctant to cherry-pick demographics from their site — they’d rather sell the a single package. But with targeting promising higher prices, publishers have been loosening that reluctance. Still, the problem remains of how best to coordinate those sales quickly and easily.

While there are so many audience data and targeting platforms out there who can all more or less make the same promises of efficiency, reach and transparency, give or take a few degrees, Adobe’s Langie said the company chose Demdex that their philosophies matched up.

“Audience optimization, which we define as putting all of the data that a publisher collects and matching it to an advertiser looking to reach a specific segment of those users, is the key driver of online advertising’s growth,” Langie said. “At the same time, we want to make clear that it’s our customers who own and control their data, we don’t leverage it for other purposes or sell it to outside parties. Demdex shared that view that the best place to be is running the pipes that connect the publisher and advertiser together.”

Langie wouldn’t discuss whether or not Adobe has any other imminent plans for acquisitions in the online ad space. Demdex is the company’s second purchase since buying Omniture. Last October, Adobe acquired content management company Day Software, which was intended to serve Adobe’s main business of building website infrastructure.